The proposal brings together researchers from three universities (Boston University, John Hopkins University, and the University of Pennsylvania) with researchers and mental health commissioners from the National Association of State Mental Health Program Directors (NASMHPD) to study the political economy of mental health policy at the state level. The relations among governments at the federal, state, and local levels, in terms of their responsibility for both financing and providing services to persons with mental illness, are central to understanding mental health policy. Major differences exist in terms of the level of funding for community and hospital-based care and in the means by which funds are directed to local authorities. Our focus will be on the role of the State Mental Health Agency (SMHA) as the key actor in the mental health system. SMHA expenditure data and organizational structure information will be collected for fiscal years 1991 and 1992. The project will also use previously collected secondary data at the state level. This project will address the questions using the methods of political economy: 1. SMHA Budgets: What factors determine the overall budget of the SMHA 2. SMHA Expenditures: What factors determine the SMHA's allocation of expenditures between state hospital and community-based service.